If there’s any firm within cryptocurrency that has had its own share of scandal over the years, it’s Tether. Earlier this year, an investigation from the New York Attorney General‘s office revealed that Tether had been given access it reserves to Bitfinex in order to cover up hundreds of millions of dollars in losses that Bitfinex had suffered and also that only 73 percent of their tokens were backed up by US dollars, compared to the 100 percent they had previously claimed. At the same time, one of the most persistent accusations against the company is that they are simply a bitcoin price manipulation tool, which they have repeatedly denied.
They have been forced to defend themselves once again as on November 7, 2019, a statement was published on both the Tether and Bitfinex website in which it was stated that a recent paper which claims that a single whale was responsible for the bitcoin bull run of 2017 is false.
The blog post in question not only denied the accusations but also stated that the authors, John M. Griffin and Amin Sham, have unethical motivations to release the paper.
“To obtain publication, Griffin and Shams have released a weakened yet equally flawed version of their prior article. The revised paper is a watered-down and embarrassing walk-back of its predecessor,” the blog post says.
The paper itself has yet to be formally released but a lot of it’s key findings have already made their way into the press and it is stated that the paper will be published in a peer-reviewed financial journal in the future. The paper itself alleges that a single whale making use of Tether and Bitfinex in 2017 caused the crypto bull run that saw bitcoin rise to its peak price of $20,000 per token before is crash months later and a subsequent crypto winter. The paper then states that the whale in question is likely Bitfinex themselves and if not them, someone they regularly do business with.
This is not the only thing that Bitfinex and Tether have to worry about as an October 2019, a lawsuit was launched against them for manipulation of crypto price by a New York-based law firm and the case is still ongoing.